Housing and Local Debt are China's Time Bombs

An interview with Chinese billionaire Zhang Baoquan. A top article in the real estate section at iFeng today.

iFeng: 张宝全：中国人缺乏投资工具 把不动产当硬通货

"China now has two 'bombs', one 'bomb' is a real estate bubble and the other is a local debt. Any explosion to the Chinese economy is devastating."

“Why do local governments dare to bear so many debts, why Chinese financial institutions dare to lend money to locals, but also because of real estate.” Zhang Baoquan said the close relationship between the real estate bubble and local debt, and believed that the real estate bubble has one stone and two birds. effect.

He says China had more than 100 percent home ownership a decade ago:

Phoenix Network Real Estate: Before and after 2008, the first 10 years after the housing reform, then what do you feel when you look back?

Zhang Baoquan: Actually, I considered this issue in 2007. I personally think that from the perspective of China's real estate data in 2009, it should be the turning point of China's real estate, but I feel that there is no turning. What was the chance of becoming an inflection point? First, the private housing rate in China has reached 120% in 2009. A large part of this 120% is the housing reform housing. After the change, it entered the market. That is to say, the average household has reached 120%, while the private housing rate in the world is less than 60%.

Phoenix Real Estate: Not only is it self-occupied, but Chinese people also love to buy a house.

Zhang Baoquan: China lacks investment tools, so people treat real estate as a hard currency of their own importance. Therefore, I feel that if I turn around in 2008, I believe that the development of China's real estate can become very benign.

The reason for not turning around is twofold: at that time, real estate was an important engine for our economic development. It drove many industries and had a great impact on the GDP of each city. Most importantly, it has become an important source of local fiscal revenue. A very important reference indicator for predicting the future repayment ability of a local government is land sales data, which is also the main source of fiscal revenue.

Phoenix Network Real Estate: But people still have expectations for the future growth of the house, and a habit has been formed.

Zhang Baoquan: In the past 10 years, we have been safeguarding the interests of the industry. Today, I personally think that any economy does not exist in isolation, and any industry is not isolated. The real estate industry, especially our chamber of commerce, should look at China as a whole from a macroeconomic perspective. Economic structure and composition. The Chinese people have the lowest debt ratio in the world more than a decade ago. What is the current situation? The Chinese people are one of the highest personal debt groups in the world because the money is all in the house.

Phoenix Real Estate: What are the risks?

Zhang Baoquan: I think China now has two “time bombs”, one is a real estate bubble and there is a bomb local debt. I think China needs to consider how to prevent the real estate bubble from bursting. This should be one of our strategic priorities. If we are still pushing ourselves up, we can not cure the bubble if it is not limited, once there is a bad possibility. It will burst quickly. Just like the grievances of the Yellow River, it keeps raising and raising, and once it is gathered, it will quickly flood the underside. Therefore, today's two land mines in China, I think have to be prevented, any mine explosion may make the results of reform and opening up for so many years may be seriously damaged, and even have to retreat many years ago.

As One Default Averted, Another Arises

Default whack-a-mole is underway.
Kaisa Back From Brink of Default With Sunac Stake Purchase Deal

Three days before the end of a grace period for Shenzhen-based Kaisa to repay $23 million of interest on a bond, Sunac China Holdings Ltd. said it agreed to buy 49.3 percent of the troubled developer.

...“If Kaisa collapses, there’s no winner,” Sun said in an interview at Kaisa’s headquarters in Shenzhen, a southern Chinese city that borders Hong Kong. “But if it’s done well, it’s a win-win” deal, he said.

Sunac, which is among the top five developers in Shanghai and its hometown of Tianjin, is buying the stake from Kwok’s family trust. The acquisition would be an opportunity for the company to expand into southern China, Sun said

On the very same day, another default situation emerged.

This debt in question was issued by 安徽蓝博旺机械集团, or NBO Group/NBO Forklift, in two bond issues sold in 2013. The first bond comes due on February 4, 2015, and the company doesn't have the funds to pay principal or interest.

These bonds are dubbed "2+1" because it gives the bondholder the right to demand payment of principal and interest after two years.

The so-called "2 + 1" structure and these institutions who said the "exercise", that is to give the bondholders at the two-year period to the early termination of the credit relationship, requires issuers advance payment of principal and interest on the previous two years. Because the two bonds are "2 + 1" structure, the exercise date are approaching, but then broke the main aspects of the issuer overdue debt, cash flow is more intense, limited assets and Litigation, guarantor promises broken and other issues, two only bond default risk is almost a foregone conclusion.

Worthless credit guarantees are back in the news after a brief hiatus.

In the Sohu article on the same news, analysts say 2015 may be the year of year of peak private debt defaults, due to the amount of debt issued from 2012 on.

SME private debt alone has more exposure to the risk of default, including the "13 Chinese beads debt", "Jin BBDO 12", "12 Kim Tae debt", "13 Sen debt" since 2014, "12 Walters," and so on, defaulted. However, 2015 default cases could be much higher than 2014. 　　

"This is the test of SME private debt since the 2012 trial, from June 2012 issued the first. Because most of the private debt term for 2-3 years, in 2015 or are private debt default peak, preventing private debt defaults could become a big story in 2015." Minsheng Securities bond market analyst Li Jilin told the reporter.

Compared to corporate bonds, a big reason for for private debt defaults is there are many illegal operations. An SME creditor Cheng Renshi told reporters, "If you really do things strictly according to regulations, most private debt cannot be issued, and in fact there is a lot of financial problems, including the secured party doesn't exist, so there are many problems. " 　　

Li Jilin said that private debt default also has a lot to do with current economic conditions and the business climate, "he degree of prosperity in the industry affects firms ability to generate cash flow. Issuer NBO Group is in the machinery, equipment and instrumentation industry, the whole industry is facing the problem of overcapacity, inventory is difficult to reduce, easily leads to obstacles to cash flow recovery."

21CBH: 12蓝博债违约在即 发行人：“行权就没钱”
Sohu: 12蓝博债确认违约 年内或现私募债违约高峰

Handan Residents Afraid to Buy Homes; Market Frozen With Developers on the Brink

Earlier this week I posted Another Credit Guarantee Gone Bust, One Month After Backing A Trust, which covers the latest incident of a debtor fleeing his or her debts. In that case, the debtor is the developer Shi Yubao of Golden Century, who borrowed privately from thousands of people. The result of this episode, and no doubt the defaults earlier in the year that involved similar borrowing practices (see link above for more info), is that Handan residents are now afraid to purchase a home. They fear the others developers could also run away too since many of them have used the similar methods to raise capital.

Many developers in Handan have closed their sales offices and are in no mood to sell homes, they're looking for a way out instead. Besides the home buyers disappearing, the lenders want their money back. Suppliers and contractors want their money too. Normally, they would settle their accounts with developers at year end, but now they want to be paid in advance for fear the developer could skip town.

There is nearly a ￥10 billion black hole of private lending. Dozens of developers have 300 projects underway in Handan, at least half used private money. About ￥6 billion is already in trouble, but it could grow to ￥10 billion as other developers get into trouble. Interest rates on money raised from individuals can exceed 20%, and in order to keep up with debt costs, developers need rising home prices. With the market cooling, the developers can no longer out run their interest costs. According to the article, price growth through August is only 3% since 2012. Back in 2012, the estimated average profit on a home sale was only 19%. With construction costs rising, financing costs piling up and prices barely rising, profits have no doubt tumbled.

Handan developers are intimately tied in with local government and non-local developers avoid the market. Golden Century CEO Yu Shibao, the man who has fled town and precipitated this latest crisis, was appointed to a supervisory position in the Hebei Province People's Procuratorate. The firm also obtained the best pieces of land in Handan at preferential prices. Other developers also have ties to provincial government offices.

某城房企集体违约引崩盘 当地人不敢再买房

10 Years of Wealth Accumulation Gone in 2 Years

Yulin in Shaanxi became wealthy on coal mining. Then came a real estate boom, pyramid loans and the bust. A decade of wealth wiped out in a two year crash as coal prices collapsed. The saga has everything. Bank loans were cheaper than private loans, so individuals loaded up on bank debt and then lent into the private market to earn higher rates. Credit guarantee firms, rehypothecated assets and fraud all play their role.

Yulin, Ordos and other isolated cases, in part because of the coal industry, in part because they took speculation to the extreme. However, the stories here are only amplified versions of what goes on all over China.

榆林民间借贷危机：谁是债务雪球推手

￥8.7 Trillion in Land Finance At Risk

The anti-corruption freight train is barreling down the tracks and ahead of it is the oncoming land finance freight train.

A strict audit of ￥15 trillion in land sales is going to uncover dirt in many Chinese cities. Already, according to the article below, 9 cities have been found to have violated regulations governing land finance, including Shangluo, Hengyang, Neijiang, Xingtai, Huzhou and Suqian. Recall how land finance works:

Chinese local governments sell land to developers who build homes and commercial centers. The revenue from land sales pays for development of supporting infrastructure, everything from roads and subways to schools and parks. Land sales also finance local government debt which exploded after 2008. In the post-2008 economy, developers rushed to build property amidst a real estate bubble and when the government moved to restrict activity in first- and second-tier cities, developers poured into third- and fourth-tier cities and repeated the model. However, developers have run ahead of many local governments. In areas where there are true ghost cities, support infrastructure such as schools and hospitals have not been built. If the real estate bubble bursts and land sales fall, local governments will need to find another revenue source or they may be unable to finance the infrastructure that generates GDP growth and supports the local real estate market, and they may even face a debt crisis in some of the worst hit areas. This ignores all the potential issues with indebted developers, plus overproduction and bad debts in other sectors of the economy.

84 major Chinese cities have borrowed ￥8.7 trillion, backed by revenue from land sales. If cities have violated regulations or violated the law in their use of land finance, things could quickly come to a head in areas where the governments are borrowing to survive, which is already the case in some cities.

The conclusion to the article is a good summary:

"Mortgage financing using state-owned land, borrowing money to promote urban development and stimulating economic growth, this economic growth model is not sustainable, it can very easily bring about hidden volatility in the capital markets and macroeconomic development." Wang Jianwu told reporters, the key to solving the problem is for the local government to gradually adapt to the "new normal," get rid of "land hormone" stimulus, while local governments also need to shift from the dominant role of economic development to servicing economic development.

Yet again, the anti-corruption probe lines up with the leaderships vision of economic reform. By squeezing local governments' ability to borrow through land sales, the shift towards a rabalanced, market-based economy can proceed more quickly.

84城土地抵押融资达8.7万亿 地方热衷借钱过日子

Land violations since the end: disaster from the city involving the amount of mortgage financing 84 Super 8 trillion

Experts said the local government is keen to "borrow money to live", need to get rid of the "land hormone" stimulus

Terence Chang

Excessive growth of land mortgage finance financial debt behavior is giving land mortgage financing of local government in land use and management of illegal hardest hit.

It is understood that since the end of July this year, the State Land Inspector of each branch of total cases of illegal land projecting nine cities warning interviews. Among them, Shangluo, Hengyang, Neijiang, Xingtai, Huzhou, Suqian six city was clear that the presence of illegal use of land mortgage financing has become a common problem of illegal land areas.

Ministry of Land, an insider told the "China Business" reporter, said, according to the latest statistics, as of the end of June this year, the total amount of land mortgage finance 84 major cities has reached 8.7 trillion yuan, including enterprise mortgage financing, but the city voted government, construction investment and other financing platforms accounted for the majority.

Reporters wrote to the Ministry of Land verify the data and want to learn more illegal use of land nationwide mortgage financing the overall situation, but as of this writing, has not been back.

84 city land mortgage financing amounted to 8.7 trillion yuan

Recently, the Ministry of Land, an insider told reporters, according to the latest statistics, as of the end of June this year, the total amount of land mortgage finance 84 major cities has reached 8.7 trillion yuan, including mortgage financing companies, but the government City investment, construction investment and other financing platforms accounted for the majority.

But these experts also said that the data is only preliminary MLR data systems, present the relevant data have been submitted to the State, to be further confirmed.

According to the data, "2013 China Land and Resources Communique" disclosure at the end of 2013, 84 major cities in the state of mortgage for 403,900 hectares of land area, the total amount of mortgage loans 7.76 trillion yuan, the annual land area and mortgages are mortgages a net increase of 53,300 ha and 1.77 trillion yuan.

"2012 China Land and Resources Communique" is displayed at the end of 2012, 84 major cities nationwide mortgage state in land area 348,700 hectares, the total amount of mortgage loans 5.95 trillion yuan, an increase of 15.7% and 23.2% respectively.

"Total loans and mortgage financing major cities with more than 20 percent of land is probably an annual growth rate last year, the growth rate reached 30.4 percent, more than 8 trillion yuan is the basic certainty." The insider told reporters.

In this context of rapid growth, the use of land for violations of mortgage financing has become a common problem in the place of illegal land issues.

Deputy Commissioner of State Land Supervision Bureau 赵毓芳 Shanghai municipal government during interviews Huzhou main person in charge pointed out that mortgage financing Huzhou land violations, illegal approval of temporary land use issues more prominent, with strong representation in East China. Interviews At the meeting, Vice Governor of Zhejiang Province, Xu-Ming Huang reminded cadres at all levels, Zhejiang, do not suffer in silence, do not have luck, and just on land use and management issues do not make the "uncorrectable errors, earth-shattering mistake."

In fact, the illegal use of land mortgage finance financial debt problem has become an annual national land inspectors found the hardest hit. March 12 this year, the Ministry issued a "Notice of State Land Supervision" shows, where some of the city and county governments dominated by repeated illegal acts, land management situation is still more severe. Among them, the illegal use of land mortgage finance financial debt side, there are inspectors in the routine presence of 48 cities in 19 cities illegal land mortgage financing behavior, involving a total of 1361 projects, land area of ​​14,233 hectares, the amount of 118.379 billion yuan mortgage.

"In the Land of mortgage financing process, local governments can issue warrants dominant state-owned land use, land valuation, land allocation and other procedures, which is the main cause of illegal-prone." Land and Natural Resources Law Center Research Associate Jianwu said.

The Working Group has been set up a comprehensive inventory of Hengyang rectification land violations

"Local government financing platform to land by way of mortgage financing debt financing is compelling choice, especially in some provinces and cities in central and western regions to rely on maintaining a high investment-led economic growth." Jianwu said, there is another important reason is that Local governments in developing economies keen to "borrow money to live" to promote urban infrastructure with land mortgage financing to the money quicker and easier the achievements.

Reporters learned that, in order to enhance their own government financing platform management capabilities to enhance the city voted, built the company's total assets and net assets, thereby successfully finance, local government, without exception, the company chose to inject a lot of land in the platform the way.

A Case Study of Hengyang Hengyang city government to enhance Urban Construction Investment Co., Ltd. (referred to as "Hengyang Construction Investment") is operating capability in 2008 by the "Office of Hengyang Municipal People's Government approved the transfer of land on the consent" of approval Shek Kwu District will assess the value of 2,530,641,400 yuan of 32 commercial and residential land injection; 2010 turn Yanfeng District 14 is located in the assessed value of 3,002,854,600 yuan of commercial and residential land injection.

Construction Investment is subject Hengyang Hengyang investment in urban infrastructure construction and urban assets, operations and management of the main body, including the operation of state-owned assets operations authorized by the government; land purchasing and storage, land development, real estate development. September 25, 2012, Hengyang built using the land use right to vote the way collateral issue "12 Value City voted" corporate bonds to raise funds 1.8 billion yuan, of which 1.08 billion yuan for the construction of affordable housing in Hengyang City project, 720 million element is used to support affordable housing in urban road construction projects.

It is understood that 12 city voted to provide collateral value of inventories in liquidity with strong three state-owned land use rights for the bonds debt service, to assess the value of land was 3,065,915,300 yuan.

According to the Ministry of Finance, Development and Reform Commission, People's Bank, China Banking Regulatory Commission jointly issued four departments "for the suppression of the financing of local government illegal acts notice" clearly states that "local governments should not be injected into the reserve land as an asset financing platform companies not committed to reserve land transfer revenues expected debt financing platform as sources of funding. "

Land mortgage financing has also been the Wuhan Bureau of Land Inspector attention. Deputy Commissioner of Wuhan Bureau of Land Inspector stone row in Hengyang City in 2014 notified cases of land inspectors noted the presence of Hengyang rights of landless farmers to maintain the implementation is not in place, land revenue and expenditure management issues more land mortgage finance irregularities involving large amounts of illegal land occupied a prominent problem, the government introduced the policy documents and national conflict with existing laws, regulations and policies, such as five outstanding issues.

It is understood, deputy director of the Wuhan Bureau of Land Inspector Don Sai force of the serious problems in interviews in Hengyang City in land use and management exist in the work raised serious criticism, and alert the government is mainly responsible to deeply understand the seriousness of the situation of illegal land , deep ideological roots, troubleshoot common land management weaknesses in accountability mechanisms, to prevent "re-development, light protection," "heavy landing, sparse Management" and "because of the public offense, extenuating circumstances," the idea, as well as "fragmented, there is no force "situation.

However, Hengyang Construction Investment relevant person in charge, said in an interview with reporters, Hengyang built using the land use right to vote the way the issue of collateral "12 Value City voted" corporate bonds "As far as I know and the Board of Land and land violations inspectors mortgage financing It does not matter, we do not exist irregularities. "

Hengyang City, the status quo for the land law and corrective measures, the reporter wrote Hengyang Municipal Propaganda Department and Land Resources Bureau, its reply said that after "the Department of Homeland Wuhan inspectorate Hengyang City, the main person in charge of interviews, the municipal government attaches great importance has been established Working Group, a comprehensive inventory of the problems rectification During the interview should not be a comprehensive inventory of rectification. "

"Mortgage financing through state-owned land, borrow money to promote urban development, stimulating economic growth, this economic growth model is not sustainable, it is very easy to capital markets and macroeconomic developments pose potential risk of ups and downs." Jianwu told reporters, solve this The key issue is that the local government to gradually adapt to the economic growth of the "new normal," get rid of "land hormone" stimulus, while local governments also need to shift from the dominant role of economic development services to economic development.

More Coverage of Growing Qingdao Port Cases

These stories were out during trading hours in Hong Kong, but Qingdao Port International stock actually rose on the day.

A figure floating around is ￥16 billion spread among 18 banks, but according to a relevant party, the numbers are still being tallied and he doesn't know where that figure is from.

How it works: Company A sells goods to Company C for a fixed price, then Company B buys from C at a higher price.

Next company A asks for a warehouse receipt and gives it to C. Company C uses this to obtain bank credit, adds in some of its own money and pays A for the goods.

At the end Company B has the goods, and they can sell them to Company A. Company A gets another warehouse receipt.

For letters of credit: pledge 15% to 20% of imported metal to a bank for a 90 or 180 day letter of credit. But companies really only need about one month to receive the goods and sell them. So the company has 60 to 150 days of short-term financing, plus any yuan appreciation. However, the goods obtained using a letter of credit can also be rehypothecated using the above method. Dezheng used this method with 3 month letters of credit 4 times a year and was able to achieve 10 times leverage.

The banks are rushing in to figure out what's going on, but local businesses claim they are reaping what they sowed. They claim to be victims, but they all rushed to give Dezhong credit, sometimes even without collateral guarantees.

Banks are raising their margins in response and some traders unable to come up with the funds may dump their positions. Banks are also expanding credit approval from 3-5 days to 5-7 days, requiring more documentation and verification of information.

青岛港骗贷案调查：涉案银行三缄其口 无一回应

Incident Qingdao Port metal trade finance Piandai event, is drawing attention around the events of the layers of fog, far from being dispersed.

One side is caught in the metal trade finance various home events Piandai banks on their own circumstances secretive, while the outside world and the official made ​​a direct criticism.

Relation to the incident, the recently held in Qingdao, "Jin Ling Fortune Forum", vice chairman of the NPC Financial and Economic Committee Wu Xiaoling criticized, not carefully verified Qingdao banking business warehouse on the blind expansion of credit, over-reliance on the guarantee.

At the same time, the outside world raised many questions: the protagonist of the bank's loan officer face Piandai event - when Germany is what the Department of Enterprise bear moral hazard? Bank loan demand in the approval time to verify whether the real collateral security? Germany is long and warehousing business dealings Department, logistics companies even include port operating company, how to act as role Piandai process? Germany being cheated out of money in the end line just where?

Germany is the Department "plate too."

Securities Times reporter interviewed the face, in the eyes of these events storm almost Qingdao banking group to the metal trade finance Piandai events remain silent. As of press time, the Securities Times reporter banks involved have not been any positive official response.

Earlier media have exposed for 18 banks 16 billion of funds involved in the event of credit, joint-stock banks Qingdao Branch, who asked not to be named, the Securities Times reporter said: "Total loans and exposures among banks is still under Statistics I do not know how the data is reported in the statistics out. "

To this end, the Securities Times reporter to call the advisory agency responsible for a dozen banks, stand up in a court case over one hundred Qingdao De Heng Law Firm, sources said, "billions is certain, specific amount of money involved is not much to say. "

Non-ferrous metals financing Piandai since the scandal, more than half passed, the amount involved in the ever-changing. A local official said the private enterprises, the delay in the final data released, probably because "Germany is the dish too."

Securities Times reporter combing business registration information found Germany Germany is based on positive Resources Holdings Limited as the axis radiating outward, showing the relationship between the company reached 12 only on equity relationship. It also is not other upstream and downstream enterprises Germany are both headed the Department of Chen Ji Hong, Chen brothers Keelung actual control.

Two-pronged set of funds

Qingdao Port nonferrous metals financing Piandai event disaster from repeating the pledge of warehouse receipts. It is understood that the process is not complicated, the operation point is to ensure that participants have at least three, and they are "insiders."

Specific procedures are as follows: First, A number of companies will goods sold for a price of Company C, then Company B then promised to buy back at a higher price. As a result, C Company can earn them the difference.

Secondly, A company needs to call the company issued a warehouse storage warehouse; while C Company will use this warehouse to bank mortgage financing, the money comes out, plus some of its own funds, payable to A Company. This time B is the recipient of the goods, get the goods, you can then sell it back to an agreed price of Company A, A at this time and can once again make a warehousing company re-issued warrants.

Thus, according to the above manipulations, a company can together warehousing company through its different subsidiaries of the same batch of goods out of the warehouse more than one, then to defraud the bank as security for loans.

In addition to using repeated pledge of warehouse receipts, the use of letters of credit to finance but also some businessmen modus operandi. It is understood that the latter operation is as follows:

First, import enterprises to import a number of banks to deliver metal (such as copper, aluminum ingots) deposit - usually 15% to 20% of total metal goods, followed by banks to companies out 90 days or 180 days credit. But companies actually do not need to get the time of Metals 90 days, about a month will be able to arrive and quickly sold. Thus, companies have an equivalent of 60 days or 150 days of short-term financing. If we add the yuan appreciation, importers can also get additional foreign exchange earnings.

However, the pledge of warehouse receipts and credit financing are not mutually exclusive, that is, can be performed simultaneously. Before the credit expires 3 months to 6 months has made corporate ownership of the goods, the goods into the warehouse and then several times to obtain the standard warehouse receipt financing.

In this event, Germany is on the mastery of the above two lines of play. Its credit longest three months window period, that is, one year down the number of goods can be inverted four times leveraged to several times the rate of amplification.

Warehousing company and port role in doubt

Banking industry sources said that in the metal trade finance chain, the more sensitive the identity of the middleman and warehousing company guarantor.

Securities Times reporter was informed that the Singapore International warehousing giant fast-Group (CWT) is NCN Mining (Germany being the core business lines) issued a warehouse. But reporters could not get in touch with the latter.

As the concentration of the metal cargo warehouse Qingdao Port Pier 8, it is difficult to escape the stakeholders. Terminal operators, port is the port of Qingdao Branch.

Www iron ore researcher Lau Chi Keung said metal trade finance not only in Qingdao, Rizhao, Yantai, Shandong ports prevailed more prevalent in Jiangsu and Zhejiang provinces. However, with the presence of the two mortgage finance goods warehousing risks: First, raw materials prices, accumulating goods will be insolvent; Second, once the funding strand breaks, the risk will focus on the release. Germany is the system this time stumble on the latter, Qingdao Port has been implicated.

Been clearly implicated more than Qingdao Port. Although Qingdao Customs official responded that "we have been very strict on the regulation," but in actual operation, metal financing Piandai incident exacerbated a crisis of consciousness customs. A logistics company in Qingdao local bulk ship who declined to be named, said the imported metal - such as copper cathode clearance time from the past seven days to 10 days into the current 14 days to 20 days.

As the import and export trade port, Qingdao financial disputes caused by trade financing frequent. Qingdao Banking Bureau data show that closed the case in 2013 the number of 15,630 cases of financial, accounting for about one-fifth of Shandong financial cases, an increase of 8.8%; target amount of 15.103 billion yuan, an increase of 15.9%, both of which showed rapid upward trend.

Bank to remedy the situation

"Germany is our department of Qingdao local big customers, banks are rushing to do their business while after this sort of thing out of the bank's credit approval centers are dumbfounded." Above joint-stock bank source said, "only from the equity relationships, but also What other companies with bad judgment Department about Germany is our banks are now only a family business dealings from the investigation to determine how much the loan out in the end. "

However, a number of private enterprises in the local view, banks, the "victim" status, like a boomerang. "Many banks feel that Germany is the high quality and large customers, anxious to do business related to it." Said a private person, "said the loan has collateral guarantees, but maybe sometimes even a pledge not to become a Credit guarantee. "

The vice chairman of the NPC Financial and Economic Committee Wu Xiaoling criticism undoubtedly eager to expand the scale of bank credit blow. June 21, held in Qingdao, "Jin Ling 2014 Fortune Global Forum," Wu Xiaoling criticized, not carefully verified Qingdao banking business warehouse blindly expand credit, over-reliance on the guarantee, there is no longer a serious business UNPROFOR investigation Cash flow security, resulting in an enterprise running, along with other corporate capital chain break situation.

"Financial leverage to be cautious expansion, banks should return to the essence of credit operations," Wu Xiaoling said.

Securities Times reporter was informed that the banking sector has been some action in Qingdao, the cost of credit financing raised margin of 15% to 20% range. In this regard, www aluminum researcher Zhang Meng said the tightening of trade finance bank, will make some traders have Paohuo to draw funds to respond to margin calls. Obviously, the price of copper in the short term this will, aluminum and other metals have a certain impact; If part for aluminum and other metals into secured the spot market, will result in relatively large throwing a single short-term, causing prices to fall.

In addition, the Bank has also strengthened the credit review time. Originally 3-5 days may be issuing, now extended to 5-7 days, and requested more documents in addition to the authenticity of that trade turnover data, import and export of time, including the audit authority also received from some branch of Even the head office to branch level, and also afterwards to send someone to check whether there is an actual trading behavior, how to sell to the import of goods and other details.

Qingdao Port Scandal Grows: Multiple Court Cases; 9 Banks, 29 Companies Involved So Far; Money Went Into Real Estate Speculation

The Dezheng case just one among many now. Cases have been filed in Qingdao's courts involving more than 10 contracts, 9 banks and 29 companies. And that's only from June 16 to June 20. It's unclear where all the money has gone, but a lot of it likely went into real estate. One analyst said, in regard to Dezheng's real estate investments, that he was shocked at their complexity.

A Large Sum of Money Went Into Real Estate

Metal warehouse repeated pledges by some traders who draw the line Piandai have reached a pinnacle.

Germany is based metal trade finance Piandai case is not isolated cases, only the June 16 - 20, 2009, Qingdao had more than a dozen financial loan contract dispute trial involving nine banks, 29 companies.

The companies involved in the real estate business figure are frequent. Qingdao local private business owners, said real estate is the ultimate flow of huge amounts of money.

Chain directed at real estate

Last week in Qingdao City Intermediate People's Court dozen borrowing from financial disputes, the Bank involved in 5 cases. Qingdao held constant litigation objects include steel, Qingdao Huachu Investment Guarantee Corporation, Westport materials company in Qingdao, Qingdao Jie from materials trading company, Qingdao Sheng Ding estate companies. Arising from either the company's main business covers steel wholesale, investment guarantees, and export logistics and freight forwarding chain, real estate development.

Obviously, this is a complete financing chain. The money gone - the current lack of definitive data or information can be directly specified destination, but someone's company's operating business itself might be able to explain some problems.

In the five lawsuits cross the line, the real estate company Qingdao Sheng Ding estate companies were involved. Huachu large integrated commercial office building on Jiaozhou home built by Sheng Ding, and Huachu building project is also home dubbed Shengding name "Jiaozhou Qingdao Municipal Government and municipal key projects," said.

The other one real estate company in Qingdao Haikun estate companies figure also showed the meantime. Registered capital of 100 million, together with the shareholders of Qingdao, Qingdao home Haikun Lee Jun Ho Group, Qingdao Li Bo Hao Industrial Development Corporation, Loncin source Trading Company, constitute a chain of interest, banks are resorting to Qingdao courtroom. This chain, there are three companies involved in real estate development and leasing.

Notably Qingdao Haikun home may be just a case of its shareholders' funds strand breaks implicated in the case. In April, Lee Jun Ho actual control group due to funding strand breaks foot, Qiandai amount currently exposed by the media on more than 1.2 billion, involves at least three banks and a number of private lending companies and individuals.

Lee Jun Ho Group originally the main steel sales, after conversion to real estate development, and the development of four properties in Qingdao. Haikun home with Lee Jun Ho Group has the same legal representative - from late April on the female foot lost contact real estate tycoon Wang Li.

Germany is the Department came out on top

Germany is the main character in this series Qingdao Port metal trade finance Piandai event, the purpose is exactly the same with Lee Jun Ho Group - together with related companies are Piandai main business revolves around the metal started the final delivery points of interest are considered the industry real estate. But Germany is in the interests of access and delivery system on the pipeline is clearly better than Lee Jun Ho came out on top.

First, the protagonist of this Piandai Germany is one of the core members of the Department of Mining shareholders Tak-shing, is the property of Qingdao Jiaxin Investment Company Limited.

This is just the first step. A little further, Jenny home and Germany is also one of the owners of the Department of Keelung Chen (Chen Hung-based brothers) were invested 71.5 million yuan and 38.5 million yuan was set up in Qingdao bright future Investment Co., the main real estate development.

Germany is a bright future investment company based on the starting point, stretch with at least four real estate development company "bright future series." Chen also served as supervisor of Keelung in front of one of 程盛世 Fairview Landmark Limited.

In addition, the Department is also positive forces of Germany to "Jay positive line" Another main international trade and real estate investment penetration.

Business information, a bright future real estate development company legal representative Guo Cheng is two shareholders, "Jay positive line"'s Jie Cheng Trading Limited. "Jay positive line" core business - Jay are the registered capital of 300 million yuan investment, the main international trade, real estate and investment management, owns Jinan Seven Valley Tourism Development Co., Ltd. Jingjiang, Jiangsu comprehensive development of villages and towns, Ltd., Shandong Coastal Run City Properties Limited, a subsidiary of Qingdao-than-commerce Limited.

Seven main cultural property of Jinan Valley Tourism Development Co., Ltd. won the Seven Valley Cultural Jinan Forestry Industrial Park Project. According to the plan, the industrial park will be an area of ​​4.13 square kilometers, is expected to be completed within five years. But in fact, I do not know for what reason, the progress of the project without delay.

"Last year, just won the 400 acres of land, has not yet started." One staff member said seven valleys on the phone.

But the main residential real estate investments is encouraging positive Jie, a real estate investment projects in Jinan City "Jay positive Ridge apartment Square" has been basically sold out. The project named "Jay n - Mountain Mountain", the Securities Times reporter inquiries the sales office was informed that the estate mainly in 36 square meters to 75 square meters of mainly small apartment, has been basically sold out. Statistics show that the real estate area of ​​15,456 square meters, belongs to the small estate in Jinan.

In this regard, analysts said Germany is the Department of Real Estate layout intricate architecture amazing.

More on Yang Dingguo Disappearance; Network of Credit Guarantees May Be An Issue

A few days ago, a major department store in Hangzhou shuttered: Hangzhou Department Store on Financial Street Closes Suddenly. The disappearance of owner Yang Dingguo (head of the Zhongdu Group) was given as the reason, and it was believed he fled ￥200 million in debts. Now that number is up 10 times. The latest figure comes from official records, but it may not be the final figure. One creditor said he believes the firm has ￥2 billion in debt and ￥1 billion in assets.

The article closes with a reminder on Hangzhou's network of credit guarantees. Any number of firms could be pulled into this crisis either because they guaranteed Zhongdu's debts or because Zhongdu guaranteed theirs. This news looks like nothing in the grand scheme of things and will be nothing if it is isolated, but it could also be pulling on the loose thread of a sweater.

杭州中都集团董事长杨定国跑路 留下20亿巨债烂摊子

Yang Dingguo left a final message outside the June 16 evening Hangzhou flights to Beijing, and then disappeared.

Yang Dingguo overwhelmed running, led to the outside of the huge financial hole behind him guessing.

As both chairman of Yang Dingguo, Hangzhou is well-known local entrepreneurs, both Group was established in 2002, is currently the main business of real estate, commercial department stores, hotels, Fushen special series ( Property Management , Real Estate, Novi garden, finance , etc.) of the four business units, its total of more than 20 wholly owned subsidiary.

The Yang Dingguo missing, reminiscent of some entrepreneurs in Wenzhou three years ago due to financial crisis staged foot chain tide events. So, in the end both the Group owed much debt?

2000000000 huge debts

For all of the Group's financial position, in addition to Yang Dingguo addition, Zhou Hong, the former chief financial officer of the Group are perhaps most clearly. However, both internal staff said over the years, has been to follow Yang Dingguo Zhou Hong, has been working in both groups, but recent weeks have group leaving from Rainbow.

Departure from Zhou Hong, Yang Dingguo now and then on foot, so that more and more of our employees are uneasy. Today, both internal staff, pointing to the company's financial concerns have been suspicions, and the group began to have a variety of self-examination.

"As of June 20, in both the Group's external debt of about 20 million, this figure is not everyone's guess, but the last two days, according to the certificate of financial statistics out of the room, and that this data is constantly changing." In Investment Ministry official said all groups.

It is reported that both owned by the Group, "both" trademark, has won three consecutive Hangzhou famous trademark, the group also has been awarded both the bank and the credit unit credit "AAA" grade enterprise. The main sources are the Group's financing, including bank loans, entrusted loans, trust loans, small loans, etc.; addition, Yang Dingguo and in both groups, but also to the internal employee fund-raising, as well as lending to the local population.

Reporters learned that on June 18, the day that Yang Dingguo on foot, in both the Group had a bank loan of $ 4.7 million to be repaid, but Yang Dingguo disappearance, also means that the loan becomes overdue. "Then, all of the Group due loans, there are many, Yang Dingguo this walk, other creditors such as banks, and will definitely come ahead dun." Are Group insiders said.

Guarantee crisis

Currently, the outside world can query all Group Public debt is three pen close ties with the capital market financing. That June 14, 2012, China Railway Trust is a trust in both the department provided $ 130 million loans for a period of 30 months, the level of annual yield of 8.7% to 11%. In addition, Ting Holdings (03398.HK) Announcements, December 24, 2012, the company through the Bank, to Hangzhou in both shopping centers to lend 30 million yuan, the period of 24 months, the loan interest rate is 18%. July 15, 2013, the Great Wall Trust Trust issued 50 million yuan in loans to Lin'an Properties Limited, the product term of 18 months.

Creditors Wu told reporters that he learned of the message is:. "Currently, Yang Dingguo debt of about 20 billion, but the value of all the Group's existing assets should be 10 million, the two meet, the funding gap, but also one billion yuan Yang Dingguo this one running, the problem becomes more complicated., both groups will accelerate the collapse. "

Right now, is how to find Yang Dingguo imminent. Many of our staff have hope, Yang Dingguo just lost phone contact, or in a bad mood shut down for two days, a few days will be able to return to Linping. However, they have prepared for the worst - in front of the clues to find the way out to the local public security authorities.

Jiangsu and Zhejiang, the capital, has always been a custom of financing guarantees, guarantees of extending outward these layers, and ultimately the formation of a large-scale security circles, in the end there is a drag on the number of enterprises affected by this guarantee, is still a mystery.

Trending in Shenzen: Sell Your House to Yourself, Obtain Millions in Bank Loans

Property agents and homeowners are working together to obtain bank credit. A homeowner dumps their property to an intermediary for an inflated price. This leaves the buyer flush with cash and able to obtain a mortgage to buy a new home. The intermediary then sells the property to a company controlled by the original owner. Since it is a company, the homes are recognized as fixed assets and the company can obtain credit to purchase the homes. The process pushes up home prices, increases transactions, increases the amount of credit available to speculators, which then benefits an array of high risk borrowers starved for credit. A win-win for everyone involved in inflating the real estate bubble.

Although this scam has always existed to some degree, due to the cooling real estate market, it is becoming much more popular. Real estate appraisers, real estate agents and micro-credit lenders are teaming up with real estate speculators. The appraisers inflate the value of the properties, which by the end of this process may be inflated by more than 80%. (First the home is sold for an inflated value of 35% through the sales agent, then the company buying the property has the appraiser appraise the homes at 35% above the purchase price.) Then the sale is contracted outside of the banking system, with the final step being the obtaining of fresh bank credit. If a home buyer went straight to a bank, the bank would only lend 60-70% of the home's value and they tend appraise value on the low side.

Mr. Zhu of Shenzhen used this process to obtain ￥30 million in bank credit. "The homes are still in my possession, but by transferring them I can obtain much more money."

Some of that money is used to buy more homes, but some is also lent to micro-finance companies for high interest lending. Some are also moving into commercial real estate investment.

In order to pull this off, you need a lot of guanxi (关系), relationships with these various parties. An individual cannot do this on their own. This method is also explicitly illegal under Chinese law. A recent case in Dongguan involved a developer who used this process 7 times over in order to obtain more than ￥10 million in credit. He is currently being criminally prosecuted for fraud.

"This type of mortgage financing method can increase leverage and hide the greater risk. If one link becomes frozen though, it can set off a series of crises," said a employee of the Shenzhen branch of Agricultural Bank of China.

中介联手炒房客伪抛盘套房贷 暗催楼市泡沫

Recently, Guangzhou, Shenzhen and other cities are frequent hand housing focus on selling. Significant increase in the number of second-hand housing behind the plate, the hidden part of the real estate speculators who made ​​"pseudo-selling" phenomenon.

"China Times" reporter found that some have multiple sets of real estate investors, first outside "sell" personal name in real estate, then operated by the company I then set. During this period, I and the company are to "increase the bank account running account" and "fixed property increases" as an excuse, taking double the loan, or find housing valuation rating agencies will do high, obtain from banks, small loan companies and other institutions far exceeding the value of housing loans, credits or even up to tens of millions.

"Just housing transfer, changed the name, you can increase the loan amount, but directly to the mortgage, mortgage loans from banks is certainly not so much." Intermediary agents in Guangzhou, a senior, said Mr Wong.

Although this phenomenon has always existed in the secondary housing market, but the recent transaction with deserted started to become more frequent. Had "disdain these penny earned" intermediary agency, housing assessment companies and small loan companies, real estate speculators who now work together to help cover the loan earn commission, formed a gray interests of the chain.

"Left hand down the right hand," the taking of loans

"City House, 9 sets, centralized Asking, MISS." Above Guangzhou Wong, senior intermediary agents to issue a message to the old customers. He told this reporter: "These people do not buy real estate outside of less than one thrown out, the other will soon pick plate, both sides are good agreement."

Mr Wong said this 9 suite is owned by private business owners, then the disc is a company that operates the business owner. "Fast disk access their company, intermediary which assistance can be taking large loans. Similar approach has a lot."

Mr Wong told reporters, these business owners through intermediary agents familiar Asking and find "opportunities" in the housing assessment agencies do high housing valuations. After the completion of the transaction, holding down payment loan has been paid to prove, they can obtain bank loans. "After obtaining the loan, but also notary house is still owned by sellers who, after the signing of the contract by doing the yin and yang of high housing valuations, the contract price of a suite of more than 30% of the actual maximum energy turnover."

"If you have to go to the bank is the lender for a loan, the loan amount only to assess the price of 60-70%, and housing prices have much lower assessment." Guangdong Development Bank, an insider told reporters.

Shenzhen business owners Chu also passed two months ago in a similar way, the success of taking loans in excess of 30 million yuan. "The house is still in my hands, but the revolution can get more money." He said.

Wong Chu arbitrage path and the examples would be similar. First, he told an agent familiar released eight sets sell real estate news, intermediaries will be given a relatively high prices, then, Mr. Zhu's company acquired the eight sets of real estate agency in accordance with the pricing.

Similarly, the company prior to the banks for home loans, first by assessing the company "gives about 35% higher than the trading price of the highest appraised value" basis which means that the housing transaction price has been raised on the intermediary, assess the price continues to increase by 35%, to "do the double high" purposes. After the transfer procedures, Zhu my account adds a substantial amount of revenue their company's real estate assets also increased significantly.

"In general, individual mortgage loan amount up to assess the price of just 70% of the purchase if the company, and good water company accounts, mortgage companies can find a facility to do XF, fixed assets if the company is more, even Jiucheng. "Agricultural Bank of China [1.18% funding research report] Shenzhen Branch of a person engaged in the loan business, said.

A real estate appraisal company insiders told reporters that the current real estate assessment has enough "flexibility" of space, according to customer needs, providing the highest and lowest evaluation price, "look for relationships, assess the company will give as much as possible under the provisions of assessment of the highest price. "

According to media reports, real estate speculators who bought the property, then the relationship between the secondary real estate mortgage, then the money to buy a house, or to lend mortgage money to lend microfinance companies. Now that the government carry out the purchase of housing, some real estate speculators put investments concentrated in commercial projects, in the same manner mortgage financing.

However, a number of respondents said that the operation can be realized so successfully taking loans, have a lot of "relationship", ordinary people difficult to achieve.

Interests of the chain "pseudo-selling" behind the

In the hundreds of thousands of yuan of bank loans seduction, with a large number of real estate firms, and intermediary agencies, housing assessment companies and small loan companies have become part of the interests of the chain.

"Over time, I will consider sub hands again." Chu told reporters that the reason for the use of the house sets the loan, mainly to ease the financial pressure Industrial operations. He admitted that he does not look empty real estate appreciation, on the contrary, he is more optimistic about the real estate investment, real estate so he insisted to remain in their own hands, not really foreign sales.

Reporters learned that, with Mr. Zhu few like-minded business owners.

Many respondents said that as an intermediary agency, housing assessment companies and small loan companies in the business of the off-season to help owners "borrow Housing Financing" you can get some commission, which part of the revenue to offset the loss of income during property transactions deserted.

Guangzhou, a small loan company official said Guo, small loan companies are mainly financed shareholder loan capital and bank loans, since this year, there are many difficulties in business operations and cash flows of the entity, coupled with the overall tightening of bank loans, small loans operating pressure has become more evident.

Guo said that part of the success to the room set-prime real estate speculators money into private lending, the pursuit of higher returns.

" Small property room bear a lot of risk mortgages, small loan companies are now doing good business, have scrambled to do a similar business, they are willing to take more risk. "By taking small property loans Liu said .

Guo said that business is good in small loans, the loan amount will be slightly below normal valuation. Now business is not satisfactory, the loan amount will be raised, so then the business will be considered at high risk, such as small property mortgages.

"With this set-prime mortgage financing, not only magnified the leverage effect, but also a greater risk of hidden Once a link is stuck in the middle, ready to lead a series of crises." Agricultural Bank of China Shenzhen Branch, told reporters.

Meanwhile, participants taking loans may touch the law "red line", the law provides for the sale of housing in the form of cash in bank loans is illegal.

Dongguan City, the second Court recently heard a related case, the Australian developer of Dongguan City, Lee Garden Development Co., Ltd. and its former legal representative Cui Zhiguang charged with liquidity problems due to the company, seven false name of another person the way from the bank to cheat buyers loans, accumulated more than ten million yuan. The prosecution, Cui Zhiguang fraudulent loans should be held criminally responsible.

New Reason to Pay Back Lenders: They Might Kill You

Last week, I posted One of China's Richest Men Cannot Repay Banks, Suspected of Illegal Fundraising.

The story deepened over the weekend, with the man in question, Liao Rongna, still out of contact. One lender has threatened to hunt Liao Rongna down and kill him if he doesn't repay his debts.

Liuzhou's richest man, lost contact after ten billion debt lenders threaten to kill

Things change, Liuzhou is experiencing an unprecedented storm.

More than a year ago, the high-spirited, Liuzhou turbot Group Co., Ltd. (hereinafter referred to as "positive Ling Group"), led by the head of Liao Rona four children Liuzhou turbot building foundation.

Today, tens of billions of debt turbot Group is involved in the investigation of illegal deposits from the public was the public security organs, Liu Rona and their children also collectively lost contact.

However, aboard ship in more than 26 billion yuan of assets, the shock waves have affected many aspects.

And when the public security organs involved in conducting an investigation, the "China Business" reporter also learned exclusively authorities turbot group consisting of financial claims defuse Working Committee (hereinafter referred to as the "Committee"), the work of the Commission has been stationed turbot Group and Under his leadership by the Industrial and Commercial Bank of China [ -0.55% funding research report ] Liuzhou Branch and other banks developed a plan to resolve the debt crisis.

Getting out of debt solutions to resolve

"We have had no new cases to be published." June 5, Liuzhou Zhou, deputy director of Foreign Affairs Office, told reporters that "external liabilities of ten billion yuan of such rumors saying there is no public disclosure of Liuzhou now Public security organs are still under further investigation, the specific amount of this level we do not know. "

May 28, Liuzhou City Public Security Bureau of Economic Investigation Detachment with a notice that my detachment found Liuzhou turbot Group Ltd. alleged crime of illegal deposits from the public in the work, after preliminary investigation, in April 2014 according to the law of the Corporation alleged illegal deposits from the public criminal investigation, please contact Liuzhou turbot Group Limited (including subsidiaries, company executives) have to raise relations units and individuals within the provisions of this notice period (May 29, 2014 to 2014 On June 13), to the designated place to register.

So far, turbot Group debt bankruptcy rumors were formally confirmed. Back in March of this year, a number of sites in Guangxi, involving turbot group can not repay a loan shark posts already emerging. In early April, Tencent estate Liuzhou station then published an article "Biography turbot Group in April declared bankruptcy five lines are its assets investigation," the article. This article mentioned turbot Group's liabilities up to ten billion yuan, the bank suspended loans to turbot Group, and loans for investigation.

After the article came out, causing a positive group turbot rebound. June 4, Tencent official told reporters Liuzhou estate, then to the overall situation, and finally removed the article.

Although the article is removed, but after more creditors as turbot Group dun, liabilities hundred million allegedly illegal deposits from the public issues are hidden behind Mitsubishi Group are gradually exposed. Link for the problem being faced by the Group, Liuzhou public security organs in the investigation, but also set up a working committee to dispose of turbot group facing a debt crisis.

It is understood that the work of the Commission has been stationed turbot Group, and joint lead arranger banks in Liuzhou Liuzhou Branch of Industrial and Commercial Bank Under his leadership, Minsheng Bank [ -0.80% funding research report ] , Huarong Xiangjiang Bank to develop relevant disposal program.

Received a submission to the Government of Liuzhou "About resolve turbot Group debt risk program instructions" from close to the work of the Committee of the key persons reporters. Consult claimed, on the one hand turbot Group's effective asset investigation has been initiated; preliminary work is indeed the right hand is also steadily; but turbot Group's debt crisis has erupted several months, debt restructuring is still slow progress in the upcoming miss defuse the risk of prime time, a committee of the Group's work and turbot The study, developed a plan to resolve the debt crisis.

Reporters learned that the program will be to resolve the debt crisis Ling Group's assets are retained assets and disposal of assets into two parts.

Retained Assets is an enterprise engaged in the production and produce normal operating net profit entities, such as factories and hotels, etc., can play a part of the assets or capital gains amplification effects, such as industrial land degeneration of land for development of a commercial nature; disposal of assets that can not increase their solvency and financial burden will bring assets.

After dividing the assets of two parts, the establishment of a new company to undertake the assets retained by the Government or the Commission, to retain full use of the assets, to enhance the company's profitability.

After the establishment of the new company, Mitsubishi Group will undertake currently about 70% of the principal amount of debt (including financial and non-financial debt claims), debt principal about the remaining 30% corresponds to the disposal of assets, disposal of assets is insufficient to cover the range, through The new company's future net income generated annually to repay each year until the debt repaid.

To this end, the Group's financial claims are resolved turbot Committee also proposed that the new company offers a range of Liuzhou tax relief incentives in the transfer of assets, land degeneration, etc., and the new company to take protective measures to cut off risks and ensure normal operation of the new company.

These key sources, June 3rd meeting of local government in principle by the program. However, as of press time reporter ended, Liuzhou relevant departments undisclosed related programs.

Qian Kun Da Nuo advance

"Turbot Group's assets should be far more than 10 billion yuan." June 5, people familiar with the Liao Rona Chen Min (a pseudonym) told reporters, "From our understanding of the situation, the Group's current core turbot There are at least 12 billion yuan of assets, plus some newly acquired businesses, and has not yet completed the formalities for change of land and other assets, as well as 7 billion to 80 billion, he is at least 200 billion yuan of assets, if we can make an inventory of assets , can solve the debt crisis. "

Turbot Group official website information display, turbot Group's assets over 10 billion yuan. Disclosure announcement with reporters from doing business turbot Group ST East for listed companies (002248.SZ), we found a positive Ling Group's assets in more detail.

Weihai Huadong Automation [ 0.36% funding research report ] an announcement Limited disclosure shows that as of July 31, 2013, turbot Group's total assets of RMB 2654115.87 million, total liabilities of RMB 851870.58 million and net assets of RMB 793,456.53 million. January to July 2013, operating income of 1,318,723.69 yuan, net profit of 1,141,660,600 yuan. However, the above figures are unaudited.

Clearly, from this point of view debt data disclosure, after the outbreak of the crisis associated with the turbot Group rumored $ 10 billion of debt only a thin 1.5 billion yuan or so. Assets is significantly higher than the case of turbot Group's official website and media reports.

Reporters in the survey also found that, with up to 26.5 billion yuan of assets turbot Group from February 2014 to begin the group level as well as the ownership structure of its core businesses conducted a number of changes.

Business registration information display, the registered capital of 60 million yuan of Liuzhou turbot Group Ltd. in February 2014 made changes to the original Group Ltd. Liuzhou turbot served as executive vice president Yang Donghai legal representative, chairman, Liu Rong satisfied only role as a Director in the company.

Turbot Group level changes occur outside Mar. 2014 Mitsubishi Group's various subsidiaries are also changed. March 11, to shareholders registered capital of 8 million yuan of Liuzhou Rongsheng Real Estate Development Co., Ltd. is changed, the original accounting for 51% of the shares of turbot group disappeared from the list of shareholders, the shareholders, leaving only Lu Chen, Bernice Liu Qun, Huang Fang, three individual shareholders.

March 20, 2014, the registered capital of 10 million yuan in Guangxi Liuzhou Thai vehicle shareholder limited liability company changed, the original accounting for 84% of the shares are no longer a corporate shareholder Mitsubishi Group, which has 廖昌勋 and two natural persons as shareholders Tran flow.

March 11, 2014, Liuzhou Baling registered capital of 20 million diesel engine parts plant in the list of shareholders, holding 51% of turbot group also withdrew from the company, the shareholders of the company by the number of individual shareholders components. March 24, the registered capital of 42 million yuan of Liuzhou Automobile Gear Works changes have taken place, the former holding 51% of the turbot Group withdrew from Qiao Ling Zhang, Shu Huiming, Chang Liao Zhai, and many other individuals as shareholders.

Since the coefficient of Liu's family lost contact, it is unclear Liao Rona hastily penned in 2014 to change the reasons for these options. However, the reporter learned from informed sources, perhaps with these changes before the outbreak of the debt crisis, Liu Rong Carolina in advance of its assets reorganization.

Since June 2013 the banks have tightened lending, is undergoing major expansion phase of turbot in order to maintain production and management group to begin lending usury. Chen Min also known as the situation: "Liao Rona told me that the bank not later than promised loans down in September 2013, a temporary loan shark to maintain production is no problem."

However, the bank did not honor their commitments. Chen Min said: "The money can only be satisfied Rong Liao desperately loan shark, monthly interest rate a quarter, one-fifth of usury, and even up to a gross usury." That time, in Liuzhou some forums, and even some people from time to time usury to be able to boast the richest man in Liuzhou Liu Rona.

By the end of 2013, under the turbot Group shattering rely on loan sharks to stay afloat is also difficult to continue the case, banks and private lenders have dun to turbot Group. Liao Rona also frequently sought by the parties to support the government and civil associations channels, hoping creditors to accept a buffer solution to stop dun let turbot Group first ride out the storm and then pay back the money. However, Liao Rona request has not been recognized creditors. Even radical individual borrowers do not pay back the money it also threatened to kill Liu Rona.

It is usury and bank credit limit "combined", eventually being cornered Link Group. Before lost contact, Liao Rona hurry subsidiary of the Group to equity levels have been adjusted. These equity adjustments, the Commission early in Liuzhou stationed turbot group consisting of time.

Currently creditor concerns, turbot Group is no longer relevant after the controlling shareholder of a subsidiary, a subsidiary of good assets still belong Will undertake corresponding obligations are owed under the Link Group.

Fear of the fermented debt risk

Over time, turbot Group debt risks being further fermentation.

"Turbot former Department of normal production and operation enterprises have been affected to varying degrees." When asked recently, turbot Group Report of the Working Committee to resolve financial claims to the Liuzhou government: "Enterprise operating difficulties emerged, corporate downsizing, declining operational capacity risk, if not promptly take measures to resolve the debt crisis, these companies will face shutdown. "

Guilin, a financial institution executives also said: "The current Guilin upstream suppliers are hesitant to back turbot Group's machinery enterprises supply, worried their payment performance capabilities."

Turbot our sector, a very important industrial sector is the machinery sector. The sector is responsible for the son Liaochang Jin Liu Wing satisfied. Public information, turbot Group constituted including Fujian Industry Group Co., Ltd. Kay reported, Xuzhou XCG turbot Engineering Co., Liuzhou turbot Machinery Manufacturing Co., Ltd., Liuzhou Automobile Gear Factory, Liuzhou Baling Diesel Engine Parts Factory Liuzhou Dongfeng Motor [ 0.33% funding research report ] Parts Plant, Liuzhou automotive transmission factories and other enterprises, and formed a car, excavators, loaders, machine tools, engines, auto parts core industries.

Information from the public point of view, the company's auto parts enterprises but also for some car companies supporting. Once these parts production will have an impact on affected some domestic auto companies.

Turbot crisis affecting the Group, the Group's debt crisis turbot also affected the automobile industry chain to a number of listed companies. Guangxi Guidongdianli [ -0.88% funding research report ] (600310.SH) announcement shows, turbot group suspected of possible illegal deposits from the public on the company and its wholly owned subsidiary, Qinzhou Win Group Co., Ltd. to Liuzhou turbot collection significant impact related payments, such as payments related to the formation of these losses, will be the company's financial condition and results of operations could materially and adversely affected. A more detailed disclosure of the company's display case, its subsidiary in 2013 and Qinzhou Insein turbot Group took place four transactions, Qinzhou Win To this end the bank out of the face value of about 200 million yuan acceptances.

"China Business" reporter also found, ST East several times to provide loan guarantees for the turbot Group. Which in March 2011 to provide 30 million yuan of bank loan guarantees for turbot Group. Announcement 3 September 2013 show that the company intends to apply for turbot in the banking group to provide joint and several liability does not exceed RMB 630 million loan guarantee. October 9, 2013, the company secured shareholders' meeting adopted the motion.

In addition, Liao Liao named Rona Rona Foundation has also taken a hit. In 2012, the Home Office approved the establishment of the Guangxi Liu Wing Kea gold. Actual operation, the Foundation launched a public service pension services, the project combines public service pension Liao Rona's financial operations platform, through commercial operations staff pension funds solve the problem of pension predicament. The project, a 50,000 yuan deposit pension staff, Foundation staff 750 yuan monthly living expenses for pension, equivalent to 15% per annum. With the group being investigated after turbot, many people chose to quit.


Foundation vice president Liaoyong Guo said that the operation of the Foundation is in accordance with national laws and regulations to run, but did not think there will be such a positive group turbot big crisis, and now there are millions of foundation funds on turbot Group financial management, as long as is proposed refund, the refund will be positive, has more than 400 million refund. "I believe the government when disposing of the underlying assets, will take into account the special nature of the Foundation, and will not let the people's pension money to be swept away." 廖勇国 said.

Reporters learned from the Home Office in Guangxi, the relevant government departments are to follow up the case. Miss He Junrong, deputy director of the Guangxi Bureau of Civil Affairs of civil society organizations, said: "There has been a meeting Board to study the matter for the relevant issues very seriously, will further understanding." Reporters survey, a person familiar with turbot Group repeatedly stressed the positive Link Group is not a sleight of hand tricks, Liao Rona thirty years has been in development entities, but encountered a special case of banks to tighten lending, resulting in a debt crisis, now might make turbot group to come forward by the government to reorganize survive the storm.

However, experienced unprecedented toss, companies are caught in a heavy crisis turbot Group is also able to have tomorrow?

Ningbo Local Government Can Repay Debt With Land Sales, But Land Sales Down 45%

The city of Ningbo in Zhejiang province is now repaying an average of ￥128 million in debt each day. The city had ￥145 billion in debt at the end of 2012, and 60% of it, or ￥87 billion, was debt backed by land sales. Land sales fell 17% by area in Q1 and 45% in terms of revenue.

By June 2013, debt had climbed to ￥175 billion. The city also had ￥51 billion in debt guarantees, and possibly another ￥73 billion in debt it may be responsible for.

In 2014 and 2015, the government must repay 27% and 21% of total debt outstanding. Due to weak financial conditions, the government must rollover at least a portion of this debt.

In 2013, Ningbo's government revenue was ￥165 billion; ￥80 billion from local sources and ￥85 billion from the central government. Ningbo's land sales were ￥73 billion.

If Ningbo could sell its nearly 30,000 mu of land reserves (convert mu), priced at ￥1.8 million per mu, it could collect ￥55 billion in revenue this year and pay back its 2014 debt, but land sales were weak in Q1 and there's no pick up yet.

An increase in land sales may only be a wish. According to one estimate, adding together land (potential homes), existing supply and current sales rates, Ningbo may already have a potential housing inventory of 10 years.

宁波现政府债危局 日均偿债1.28亿

In the media attention, Ningbo, Zhejiang prices diving, high inventory background, Ningbo Municipal Government debt should be more headaches.

"China Business" reporter recently obtained a copy of the Commissioner of the National Audit Office of Shanghai and Ningbo City and county levels auditing departments jointly issued the "Ningbo Municipal Government debt audit results" (hereinafter referred to as "audit"), "audit", as of the end of June 2013, the Ningbo Municipal Government bears the responsibility to repay the total debt of up to 173.282 billion yuan; Among them, in 2014 and 2015, the Ningbo Municipal Government bears the responsibility to repay the debt was 46.8 billion yuan, 35.7 billion yuan; This means that the Ningbo Municipal Government in 2014 and 2015 will repay 128 million yuan and 98 million yuan of debt every day, respectively.

"Audit" also shows that the end of 2012 in Ningbo city government bears the responsibility to repay the total debt of 145.58 billion yuan, a total of 87.495 billion yuan is committed to repay the land revenue, accounting for 60.10% of total debt at the time. In other words, the land premium is the main source of Ningbo Municipal Government debt. However, as of the end of March 2014 statistics show that the real estate market, "fever" is reducing Ningbo land revenue - a quarter of this year, Ningbo area of land transactions fell by 17.16 percent, land revenue fell 45.26%, which makes Ningbo Municipal Government debt risk increased sharply.

"To enter the land market downturn, some cities and even land unsold event, which will directly affect the level of debt service locations, and may even lead to periodic land financial crisis has further affected the construction of public facilities and local government solvency . "with policy advice, said Zhang Hongwei, director of research center.

Debt service over a hundred million daily

"Audit" detailed disclosure of the debt situation in Ningbo, as of the end of June 2013, the Ningbo Municipal Government bears the responsibility to repay the debt of 173.282 billion yuan, which bears responsibility for the guarantee of 51.555 billion yuan of debt, may bear some responsibility for debt relief was 72.831 billion yuan.

According to the reporter, the government bears the responsibility to repay the debt is the debt must be repaid by the financial capital, are "government debt", while the government bears responsibility and may incur secured debt relief responsibilities belong to the "government or debt" in the normal These cases do not repay the debt, but need to jointly and severally liable, or give some relief.

"Audit" revealed the Ningbo Municipal Government debt ratio at the end of 2012, Ningbo city government bears the responsibility to repay the debt ratio of 96.21%; However, if the press since 2007, each year the city's government bears responsibility for debt guarantees and possible bear some responsibility for debt relief, debt principal repayments in the year, the highest rate of financial resources to repay the actual conversion, the total debt was 108.53%.

According to government debt incomplete audit results reporters around the country since 2014 have been released, found that the rate of 108.53 percent Ningbo Municipal Government debt, it should be for the country's highest.

"Audit" also shows that in 2014 and 2015 was the peak of Ningbo Municipal Government bears the responsibility to repay the debt of insolvent were 46.825 billion yuan, 35.727 billion yuan, in the "government debt" in the proportion of the total 27.02%, respectively, 20.62%.

It is also noteworthy, sinking under high pressure, the Ningbo Municipal Government and its affiliated county and township (town) being passed "by the new-old" way to fill the debt "black hole" in order to resolve the government debt or City Investment debt default events.

"Audit" that, due to lack of solvency, Ningbo city level, three county (district) level and 10 of the township (town) government can only "borrow new debt to repay old debts," the government bears the responsibility to repay debt "old new borrowing rate" of more than 20%. The so-called "old new borrowing rate" is the "borrow new debt to repay old debt" in the principal amount of debt to be repaid in proportion.

Debt service is highly dependent on land revenue

First look at the solvency of local government revenue. Statistics show that in 2013 total revenue of 165.08 billion yuan in Ningbo finance; including local fiscal revenue 79.24 billion yuan, the central fiscal revenue 85.84 billion yuan.

However, studies have shown that the local revenue Ningbo highly dependent land premium. In accordance with policy advice Research recently released "45 property purchase financial dependence of urban land analysis report "Ningbo City 2013 Land fiscal dependence 85.1%, ranked 11 in the 45 cities.

Zhang Hongwei told reporters, urban land is the city's financial dependence on the land premium and general revenue ratio.

Data "audit" disclosure shows Ningbo Municipal Government debt is highly dependent on land revenue, "by the end of 2012, all levels of government debt balance Ningbo commitment to repay the land revenue was 87.495 billion yuan, while the bear was the Ningbo Municipal Government debt repayment obligations amounted to 145.58 billion yuan, "therefore, the Ningbo Municipal Government debt for the dependence of land revenue was 60.10%.

The bad news is that in diving prices, high inventory, capital chain tension backdrop, a growing number of real estate developers take to slow down the pace. Statistics show that the first quarter of 2014, a total turnover of Ningbo City, 54 land auction land area of ​​1,800,700 square meters, down 17.16%; land transfer revenue of 6.842 billion yuan, compared with 12.5 billion in the first quarter of 2013 per land revenue fell 45.26%.

This is undoubtedly exacerbated the debt default risk of Ningbo Municipal Government. Zhang Hongwei that "is not good for the city in terms of fundamentals, local government finances depend on the extent of land is more prominent, such as Hangzhou City, Zhejiang Province, Ningbo, Wenzhou and other. "

Ningbo City Accounting Office spokesman, Chief Auditor Andy Ho said: "The government debt from the current situation, the relationship between assets and liabilities, as well as the level of economic development, the government debt risk overall control by the end of 2012, the Ningbo Municipal Government negative. have the responsibility to repay the debt of the debt was 96.21%; overdue debt ratio were only three types of debt of 0.11%, 0.3%, 0.14%, are at a low level. "

Andy Ho also said that the Ningbo Municipal Government debt is mainly used for municipal construction, land purchasing and storage, transportation, affordable housing, agriculture, forestry, water conservancy and other infrastructure, public projects, the formation of a large number of high-quality debt corresponds to safeguard the assets of insolvent ; which, around the promise to repay the debt to the land premium, has formed a large land bank by the end of 2013, Ningbo City, 147 cumulative land purchasing and storage area of ​​1,983 hectares (about 29,745 acres).

Space land revenue Ningbo how much? Ningbo City Land Bureau statistics show that in 2013, the total land area of ​​26,695,000 square meters, Ningbo (about 40,000 acres), the land premium income 73.41 billion yuan, which can be estimated that the average price per acre of land in Ningbo to 1.835 million yuan; If Ningbo City of 29,745 acres of land purchasing and storage can all sell, you can get the land transfer revenue of about 55 billion yuan, you can repay the debt due 2014.

But according to the first quarter of 2014, near Ningbo land revenue transaction is "cut", the situation is not as optimistic.

Andy Ho also said that the audit department recommended Ningbo departments and local governments, "the government bears the responsibility to repay the debt, through budgetary arrangements and revitalize the stock of financial capital to accelerate the realization of assets such as land reserves, etc., multiple channels to raise debt service funds; strict approval to land revenue sources or provide guarantee for the debt service of the government debt borrowing, controlled increments to ensure adequate source of repayment funds to gradually reduce debt pressure. "

Reporters also interviewed Ningbo Municipal Bureau of Finance government debt management office Zhangbing Gang, he admits, "to reduce the land revenue will certainly affect the government debt reimbursement," but he also said, according to the requirements of the Ningbo Municipal Government in April 2014 meeting, involving interviews with government debt problems, unified by the Ningbo Municipal Party Committee Propaganda Department of the reply, but as of press time reporter, did not receive further news from the official.

Push to increase the difficulty of

Ningbo real estate market still further, "fever", the local government is pushing to increase the difficulty.

A local real estate industry in an interview with reporters, said that from the second half of last year, real estate developers to launch multiple Ningbo mostly in profit, even selling at a loss states, "From the beginning of this year, developers capital chain tension, real estate substantial price diving events occur frequently, in order to survive at the price return of funds to take place naturally less enthusiasm. "

Since early 2014, has appeared in Ningbo Youngor [ -0.61% funding research report ] multiple slashed prices of real estate on Long Island garden, warehouse Younger platinum Tsui, Kowloon Bay, One City Oaks flourishing association, of which, One City Oaks Saatchi association play "Breakdown upset, "" will be in the end the price war "slogan, the highest price 5500 yuan / square meter, to Ningbo dropped a bombshell property.


Let developers take to slow down the pace of Ningbo factors include rising property inventory. Ningbo Housing and Real Estate Network New online sales information, as of June 4, 2014, Ningbo housing units for 175,664 sets of salable salable area (including residential, commercial, office, etc.) more than 12,710,000 square meters.

Specific to the urban area of ​​Ningbo, Ningbo City, the latest data released by the Real Estate Trading Center, 4 ordinary commercial housing inventory at the end of the urban units for 37,971 units, an increase over the previous month 1325 sets; inventory area of ​​5,414,100 square meters, an increase of 14.2 the previous month square meters.

Local media estimated 2013 turnover of Ningbo City, Homestead, real estate construction will be the total size of more than 9 million square meters, will form a potential supply 90,000 sets of commercial housing; That, Ningbo future of real estate available for sale will exceed 25 million units, according to the current sales of two million units a year, Ningbo's take-speed calculation, Ningbo potential housing supply can be sold for 10 years.

Latest on the Qingdao Port Missing Metals Case; Details of Company Emerge; More than ￥1 Billion in Loans At Stake

A small/medium trading firm is at the center of the current story. The amount of metal involved is 100,000 tons of aluminum oxide and two to three thousand tons of copper, worth several hundred million yuan. As noted in yesterday's post, Chinese media are reporting that iron ore may also be involved, though if so there may be more than one company involved. The port is operating normally as well; when it was reported in foreign media that all shipments stopped it caused a brief panic in the market. However, given the pattern of these cases, this is truly the tip of the iceberg. As one source said, these cases are exactly like the rehypothecated steel trading cases that are now clogging the courts of Shanghai, though as of yet we don't know how large this problem has grown.

English: China Qingdao port probe fuels Standard Bank, Dreyfus unit worry

"Standard Bank Group is not yet in a position to quantify any potential loss arising from these circumstances," the bank, whose Standard Bank Plc subsidiary conducts commodities trading, said in a statement.

Singapore-based logistics provider GKE Corporation Ltd warned shareholders that it was "assessing the potential impact" of the investigation on its GKE Metal Logistics Pte Ltd unit, a joint-venture 51 percent owned by global commodities merchant Louis Dreyfus.

They are the first companies to publicly discuss the issue since the inquiry came to light on Monday, when Reuters reported the port in northeastern China had halted shipments of copper and aluminu

Chinese media has more details, including the owner of the company being taken into police custody. The company is named Qingdao Decheng Mining. It is a wholesale and retail non-ferrous metals dealer, started in 2005. The company has several shareholders and repeats the cross-ownership pattern seen in the steel-trading cases and in Xiaoshan. On the latter: In wealthy Chinese city, debt guarantees spark default contagion

Private firms often struggle to obtain credit from state-owned banks, which prefer to lend to state-owned firms due to their government backing.

That trend has worsened as economic growth slows, credit conditions tighten, and authorities work to reduce excessive investment and overcapacity in some sectors.

Steel and textile manufacturers in Xiaoshan, like other private firms around the YRD, sought to overcome such obstacles by providing loan guarantees for each other to gain bank credit.

Now defaults by a few companies threaten a chain reaction that could ensnare even profitable firms, as the guarantees have left them on the hook for debts of their bankrupt competitors.

Not only is one firm obtaining multiple loans from banks, but firms are colluding and obtaining multiple loans using the same collateral, up to as many as ten times.

An except from the Chinese article linked below:

A large state-owned trading company official told the 21st Century Business Herald reporter, specific operating practices involved in the financing of copper and aluminum are exactly the same as the steel trade rehypothecation from two years ago. A third party warehousing company and a firm collude, and even collude with bank lending officers, use the same number of goods to issue multiple warehouse receipts, then split them up and find different banks to defraud.

With ￥1 billion in alumnimum, they could easily obtain ￥2 billion to ￥3 billion in loans from various banks.

"Basically behind each copper concentrate or alumina, there are three or four different banks involved with loans using the same collateral, and even some extreme cases, the same batch of goods in different companies, mortgage repeated from different banks, the actual loan amount zoom in ten times."

青岛港风波”追踪：始作俑者青岛德诚

after the Dragon Boat Festival, Qingdao Port investigate trade finance Piandai news on commodity markets set off a new round of controversy.

"This accident is a small and medium private enterprises, mainly engaged in bauxite trade, because the exposure of company funds strand breaks, the boss has to be controlled. Consignment about 10 million tons of alumina and a couple of thousand tonnes of copper, about the value of several hundred million dollars, and the actual warehouse inventory found there are gaps, the former Hong Kong Dragon Boat Festival in Qingdao began to investigate the matter. "a senior industry source told" 21st Century Business Herald "reporter.

21st Century Business Herald reporters from several news sources confirmed that the companies involved in Qingdao Decheng Mining Limited (hereinafter referred to as "Qingdao Tak-shing"). According to sources, the company is headquartered in Qingdao, mainly engaged in bauxite, alumina and some copper concentrate imports.

"Tak-shing, with four different storage company warehouse receipts were issued, and then use the bank information asymmetry loopholes repeated pledge to different banks, the actual exposure of more than 1 billion yuan of bank loans." Sources told the 21st Century Business Herald .

Qingdao Industry and Commerce Administration website, Qingdao Tak-shing, was founded in October 2005, with registered capital of 850 million yuan, the legal representative of Chen Keelung. Operating range of wholesale and retail non-ferrous metals, gold and silver products, metal materials, such as steel. As of press time, the 21st Century Business Herald has not been contacted by the Qingdao Tak-shing, the company has no official website.

In addition, one of the shareholders of the German equity NCN positive group, the official website shows that Germany is the development of the Group is principally engaged in bauxite, alumina, aluminum for investment and development. Including NCN included, Germany is Group shares the culture, including Edward Creation Investments Limited, Qinghai Bank and other seven companies.

Insiders said that this phenomenon is quite common equity mutual SMEs, mainly in order to facilitate mutual guarantees for bank financing.

Previously, according to foreign media reports, China's Qingdao port official conduct of being fraudulent bank loans repeated pledge to investigate whether the presence of Qingdao Port has been suspended iron ore, aluminum and copper departure. This news was to let the market panic. But according to 21st Century Business Herald reporter investigation, but according to this reporter, the facts are not entirely consistent with the foreign reports.

"Steel trade financing pirated"

Many traders and industry, told reporters, "This survey is repeated pledge involved, mainly copper and aluminum, but the number of small, mainly because of Qingdao Port imported iron ore and rubber-based, rather than the larger copper imports the Shanghai and Ningbo Port , alumina imports places Lianyungang -based. "

A large state-owned trading company official told the 21st Century Business Herald reporter, specific operating practices involved in the financing of copper and aluminum and steel trade prevailed two years ago pledged to repeat exactly the same - as a third party warehousing company and corporate collusion, and even collusion bank lending officers, for the same number of goods, issuing more than one warehouse, then split up to look for different companies to defraud multiple banks pledge loan.

Value of $ 1.0 billion to a group of alumina, for example, by repeating the different banks in mortgage financing, companies can easily get two three billion yuan or more financing.

"Basically the back of each copper concentrate or alumina, there are three or four different banks in mortgage repeated, and even some extreme cases, the same batch of goods in different companies, mortgage repeated from different banks, the actual loan amount zoom in ten times. "sources.

Insiders also pointed out that this operation is repeated pledge financing practices widespread concern with the previous trade finance market is different. Repeat with the right corporate pledge financing is the same consignment of goods in different banks to obtain loans, and trade finance is long-term corporate credit issued by domestic banks, after getting goods to quickly get rid of cash, so there are more than two months time window the use of the funds.

"Bank of the two different means of financing risk control are also different. Against pledge financing, banking major regulatory authority vested goods, and for trade finance, corporate banking mainly to confirm whether the real trading background, as well as corporate and other capital flows . "these traders said.

"Qingdao Port warehouse warehouse duplicate financing situation really exists, therefore, the risk may be warehouses of illegal operations, such as steel on warehouse receipts and not on the physical quantity is often the case." Of a futures analyst admits.

"However, since last year, efforts to rectify trade finance investigation involving commodities had increased, we have contacted the foreign banks operating in this area fairly standard, the direction of the bank itself very seriously to prevent risks and regulatory changes." The analyst pointed out.

Since 2009, a number of steel trade enterprises will be injected through the false security company to secure the pledge, repeated charges, mutual UNPROFOR way, a lot of cash in bank loans. After these companies defrauding the bank loans, and transformed into an investment company will invest the proceeds of real estate, stocks, futures, and even high-risk industry usury.

"And the huge size of the steel trade finance market compared to similar tactics copper and aluminum operations repeated pledge Piandai just an isolated phenomenon, it is unlikely large-scale, long, continuous operation, because the entire operation involves many aspects, and now the bank general risks related to the financing of commodities more stringent control, generally before lending will examine whether the goods already pledged. "a medium-sized private trader said.

Iron ore financing requirements "tray"

In addition, a number of news sources confirmed to reporters that the current investigation Qingdao Port is mainly aimed batch of goods involved, the implementation of closed libraries to check other copper, aluminum, iron ore shipments are all normal.

"The cargo is checked concentrated in Qingdao Port Group Chittagong branch. Ports suspend shipments of iron ore situation does not currently exist, other bulk exports also as usual." Said a company who futures.

Qingdao Port Group on June 3 in the official micro-Bo said that although the investigation Qingdao Port Inventory things are true, but did not affect the clearance of goods transport within the harbor. May 31-June 2, 2009, Qingdao port 184 inbound and outbound vessels, including large ore carriers 4. Distributing 1.47 million tons of goods in Hong Kong, including railways, roads, turn the water simultaneously to complete the three-way local acts 736,000 tons of ore.

According to my steel mesh statistics show that as China's third largest iron ore import port, Qingdao port as of May 30 the total inventory of up to 15.96 million tons of iron ore. The incident has created some concern among similar situation repeated pledge financing Piandai iron ore exists.

"Even with financing Piandai case, the amount is very limited, so the iron ore spot market liquidity is far better than copper, and the high cost of storage and transportation, easy to preserve, lower price, therefore, for the simple earn spreads, exchange differences profitable trade finance providers, the iron ore operations are not good targets. "these large state-owned trading enterprises responsible person said.

In fact, iron is more common arbitrage by means of trade finance, the current size of the entire bank loans to finance imports of iron ore at 20 billion yuan, five lines and state-owned joint-stock banks based. Due to the recent significant decline in the price of imported ore, has caused some companies due to their inability to repay bank loans, and by the strength of the state-owned steel mills or traders preferred a "tray" force anti default.

"Often these companies are some of the medium-sized private enterprises, because of the recent drop in price badly mining, shipping is not easy, so they put these goods transferred some large state-owned steel mills, partial payment, and generally agreed 1-3 months After the agreed price to buy back the goods. these mills, in addition you can earn a profit, you can also expand trade income, and cash flow, easier access to financing from the bank. "the official said.

Since the beginning of the iron ore port stocks steadily increased. According to the joint metal mesh statistics May 30, the national 34 ports up to 113 million tons of iron ore stocks, late last month rose 5.98 million tons, refresh history. Meanwhile, iron ore prices continued to fall, until June 2 imported iron ore prices from $ 134.75 in early / dry tonne has dropped to 91.75 U.S. dollars / dry tonne, down nearly 32%.